UNITED INDIA INSURANCE CO.LTD vs BALSANGJI SOMAJI THAKORE

THIS appeal is directed against the order of the District Consumer Disputes Redressal Forum, Mehsana directing the appellant United India Insurance Company to pay Rs. 13,678/- with 15% interest and cost to the respondent-complainant Balasangji Somaji Thakore, holding that the appellant is liable under the insurance policy to pay the respondent for the damage to the taxi jeep under the provisions of the insurance policy. The learned Forum rejected the contention of the appellant that the respondent had carried 10 passengers in the taxi jeep which violated the provisions of the permit issued by the R.T.O. and in turn committed breach of the terms of the insurance policy and, therefore, the appellant was entitled to repudiate the contract and not liable to pay any amount under insurance policy.

THE admitted facts are that the respondent was owner of the taxi jeep No GRW 9472 at the relevant time and was holding permit issued by the R.T.O. THE respondent was proceeding with the jeep in which about 10 passengers were taken from Jotana to Mehsana and on the way the rear wheel of the jeep came out and accident took place and damage was caused to the jeep. One Baluji Kacharaji filed the complaint on 19.6.91 and police had prepared panchnama at the place of accident and the damage caused to the jeep. THE respondent then claimed for the amount for the damage to the jeep but the appellant by letter dated November 28,1991 informed that on perusal of the FIR it was observed that 10 persons were travelling in the jeep at the material time and that was the breach of the R.T.O. norms as well as the permit which was issued only for ONGC contract. THE appellant repudiated the liability and treated the claim as "No Claim". The main contention of the appellant before the District Forum was, the breach of the terms of the permit issued by the R.T.O. and consequently the terms and conditions of the insurance policy and, therefore, the appellant could repudiate the contract and, therefore, the liability of the appellant did not arise to pay the damages to the respondent.

Shri M.V. Surti, the learned Advocate for the appellant has mainly asserted the same contentions before us. It is also contented that the learned District Forum has not clearly stated the reason for awarding the amount of Rs. 13,678/- .

THE jeep was to be used for the purpose of taxi and, therefore, the permit was given for "jeep taxi". In the permit the purpose of journey was "ONGC". It is also stated that the sitting capacity was 5 + 1 i.e. 6 persons. From the complaint filed by Balaji Kacharaji it transpires that about 10 persons were there as passengers in the jeep. In the insurance policy it is stated that the vehicle for which the insurance was taken is "commercial vehicle" and "passenger carrying vehicle". It is also stated that the licensed carrying capacity including the driver was 6. In the insurance policy about the limitation as to use it is stated that" use only for carriage of passengers in accordance with the permits (contract carriage or stage carriage) issued within the meaning of the Motor Vehicles Act, 1988. It is also stated that the policy does not cover (1) Use for organised racing, pace-making, reliability trial or speed testing and (2) Use whilst drawing a trailer except the towing (other than for reward) of any one disabled mechanically propelled vehicle. From the part of the copy of the policy which is only produced on the record, it is clear that the jeep was to be used as taxi for carrying passengers either as the contract carriage or stage carriage. It was used as contract carriage at the time of the accident and that was within the use allowed under the permit. It is not the contention of the appellant that the two situations as discussed above for which the coverage of the policy is not undertaken did arise. THEre is, therefore, no breach of any of the conditions of the policy. It is submitted that in the permit issued by the R.T.O. only six passengers were permitted to be taken and at the time of the accident there were about 10 passengers and by that the breach of the permit issued by the R.T.O was committed. Merely because the breach of the permit was committed that by itself would not amount to the committing of the breach of the terms of the policy except there is specific provision in the policy. As discussed above there is no such specific provision in the policy produced on the record. Merely because 10 passengers were taken in the jeep which was admittedly a jeep taxi and mainly because it is stated in the permit that the purpose of journey was "ONGC" and the jeep was used in contravention of the provisions of the permit that by itself would not violate the terms and conditions of the insurance policy. In National Insurance Company v. Rajendra Hematsinh & Ors. reported in II (1985) Accident and Compensation Cases P.494 the facts were that the luxury bus was hired for the contract carriage and while proceeding met with the accident and several passengers in the other bus and the passengers in the luxury bus died. The Motor Accidents Claims Tribunal, Rajkot awarded compensation and before the High Court the contention of the Insurance Company was that at the time of the accident the driver was not holding valid permission or authorization from the R.T.O office and, therefore, the Insurance Company was not liable to indemnify the owner of the said bus and not liable to compensate. Turning down the contention, the Division Bench of the Gujarat High Court held that:- "Once it is held that the bus which was public service vehicle was used as contract carriage, then it cannot be said that there is breach of Section 96(b)(c). It cannot be said that the vehicle was used for a purpose not allowed by permit. The conditions of the policy nowhere lay down that the vehicle cannot be used unless there is a permit by the R.T.O. Office."

IT is also required to be considered as to whether there was any nexus between the accident and the excessive number of passengers taken in the taxi jeep. IT is submitted by Shri Surti, the learned Advocate for the appellant that because of the overloading of the taxi jeep, the axle of the backside wheel came out and that was the reason of the accident. IT is clear from the complaint that the back side wheel of the driver side came out and, therefore, the accident took place. The appellant, however, did not lead any evidence before the District Forum to establish that the wheel came out only because 10 passengers were accommodated in the jeep. As such there is no nexus between the accident and taking 10 passengers in the jeep. The Insurance Company was required to establish that the reason of the accident was the specific act of the driver violating the provisions of the permit and consequently the provisions of the terms and conditions of the insurance policy. Till that is established, the appellant Insurance Company cannot be absolved from the liability undertaken under the policy. This Commission in Jagdish Harilal Thakkar v. The New India Assurance Co. Ltd. reported in II (1992) CPJ 497 had occasion to consider similar contention and while turning down the contention by the Insurance Company observed that: "That under the Policy the insured was entitled, to carry six employees excluding the driver and if total six persons are travelling in the truck, has it increased any risk for the Insurance Company or were these persons were in any way connected with the cause of the accident. Our answer is no. The Insurance Company has not raised the contention that the truck was loaded with more than 12 tones of goods. That taking of these three or four persons has contributed to the cause of accident or has increased any additional liability to the company. The accident has been caused by the truck coming from the opposite direction directly dashed, with the insured truck without any fault of the driver/ cleaner. Even assuming for the sake of argument that taking of these 3/4 persons was strictly not provided, even then merely because some persons were taken by the driver and cleaner without the knowledge of the owner who had not contributed increase of risk or is not connected with the cause of accident, a contractual liability of this nature for which a very high premium has been paid by the insured cannot be repudiated by the Insurance Company. IT was merely an irregularity which is not fundamental in nature so as to put an end to a contract. This type of breach will never give a right to a contracting party to rescind the contract. He might at the most claim some relief or concession in the damage."

The Karnataka State Consumer Disputes Redressal Commission, Bangalore in T.S. Bhagiratha v. Oriental Assurance Co. Ltd. I (1993) CPJ 303 and Tamilnadu State Consumer Disputes Redressal Commission in R. Anthony Doss v. Branch Manager, The New India Assurance Company & Anr. I (1993) CPJ 557 while agreeing with the views expressed in case of Jadgish Harilal Thakkar (supra) expressed similar views. IT, therefore, cannot be accepted that the breach of the terms and conditions of the policy was committed and, therefore, the Insurance Company is not liable to pay the damages to the respondent. Shri Surti, the learned Advocate for the appellant referred Gopal Dutt & Jai Singh v. The Branch Manager, The New India Assurance Company Limited (1st Appeal No, 4 of 1992) decided on 13.10.92 by National Commission has expressed the view that in such circumstances the Insurance Company is absolved from the liability. The Hon''ble National Commission was, in that case considering the general exceptions in the policy that Insurance Company shall not be liable under the policy in respect of the accident, loss or damage and /or liability caused, sustained or incurred while the motor vehicle was being used otherwise than in accordance with the limitation as to the use. In that case 127 passengers were being carried as against 43 passengers which was the maximum passenger carrying capacity. It was held that there was clear limitation under the Motor Vehicles Act that the vehicle shall be used only for carrying the permitted number of passengers, which in that case was only 43. In the instant case, there is no general exception. The limitation for the use as discussed above did not prohibit the carrying of more than six passengers in the taxi even though that may be the capacity of the taxi. As discussed above, the terms and conditions of the policy did not prohibit such use and, therefore, merely because violation of some directions in the permit were committed and which had no nexus with the factum of accident that would not absolve the Insurance Company from the liability undertaken under the policy. The respondent has claimed the amount of Rs. 13,678/- as his jeep was required to be repaired and the respondent had to incur the expenses. That aspect is considered by the learned District Forum and, therefore, the order for paying the amount is rightly passed.

FOR all these reasons we do not find any substance in the appeal which required to be dismissed. ORDER The appeal is dismissed, the appellant to pay the cost of Rs. 250/- of this appeal to the respondent and bear its own cost. This 18th day of June, 1993. Appeal dismissed with costs.